LONDON MARKETS: London Markets Up As Vodafone Gains, Pound Falls; Investors Eye China Growth Targets
05 März 2019 - 03:44PM
Dow Jones News
By Emily Horton
Intertek, Vodafone, Ashtead among big moving stocks
London's markets rose on Tuesday, after China set new growth
targets and Vodafone Group PLC led the FTSE 100 leader board.
A weak pound was also helping lift the main index.
How are markets performing?
The FTSE 100 climbed 0.5% to 7,170.80.
Meanwhile, the pound fell 0.4% to $1.3124.
What's driving the markets?
China lowered its growth target to between a range of 6% to 6.5%
(http://www.marketwatch.com/story/china-sets-economic-growth-target-vows-foreign-companies-will-get-equal-treatment-2019-03-04)
on Monday, placing it below last year's 6.6% growth target. The
lower bound of the target would mark a three decade low for China's
economic growth, however it would still be among the world's
strongest economies.
The British pound slipped on Tuesday, following reports that the
U.K. government does not expect any breakthrough to be achieved at
a meeting between British Attorney General Geoffrey Fox and
European Union chief negotiator Michel Barnier. A weak pound can
boost the bigger index because
U.K. banks will be able to borrow in euros from the Bank of
England from next week
(http://www.marketwatch.com/story/bank-of-england-activates-euro-swap-line-2019-03-05-5485614),
the latest move to shore up the U.K.'s financial system in the
event of an abrupt and messy break from the European Union.
The BOE warned, however, that investors should still prepare for
severe disruption in financial markets if the U.K. tumbles out of
the EU March 29 with no-deal.
U.K. services PMI came in above forecast, showing a modest
increase in activity.
What stocks are active?
Telecommuications giant Vodafone Group PLC (VOD.LN) topped the
FTSE leader board on Tuesday, adding 3% after the group announced
plans to sell $4.5 billion of convertible bonds to help fund its
acquisition of some of Liberty Global PLC's European business.
"It's rare these days to see Vodafone as the biggest riser on
the FTSE 100 given its share price has been depressed for a long
time amid market concerns about the sustainability of its
dividend.
"It bucks the trend on Tuesday to top the FTSE leader board on
news it plans to raise circa EUR4 billion through issuing bonds.
Vodafone's share price strength helps lift the blue chip index
because it is one of the FTSE's biggest constituents," Russ Mould,
investment director at AJ Bell, said in a note to clients.
Intertek Group PLC (ITRK.LN) lost 3% on Tuesday after reporting
its results, with UBS analysts raising concerns about a slowdown,
despite a pretax profit rise of 2.8%.
Meanwhile, equipment rental company Ashtead Group PLC (AHT.LN)
dropped by nearly 1% despite well received results. The company's
management said that its strong performance appears to have
translated into "some short term profit-taking on recent advances,"
said Mould, who added that it "probably reflects concern that the
U.S. economy is slowing down".
(END) Dow Jones Newswires
March 05, 2019 09:29 ET (14:29 GMT)
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